Biden meets with executives to push vaccine mandates.
Daily Business Briefing
Sept. 15, 2021, 2:59 p.m. ET
Sept. 15, 2021, 2:59 p.m. ET
President Biden met on Wednesday with top executives from Microsoft, the Walt Disney Company, Kaiser Permanente and other companies that have endorsed vaccine mandates, days after he announced a federal effort to require employees of large companies to be vaccinated against the coronavirus or be tested regularly.
The administration sought to use the meeting to show that vaccine mandates are good for the economy while spotlighting employers that have mandates for workers or have praised Mr. Biden’s order. The meeting was meant to rally more business support for mandates.
“It’s about saving lives — that’s what this is all about,” said Mr. Biden, who was flanked by Treasury Secretary Janet Yellen and Jeffrey D. Zients, the White House pandemic coordinator.
“Vaccinations mean fewer infections, hospitalizations and deaths, and in turn it means a stronger economy,” he added.
One of the invitees to the meeting, Tim Boyle, the chief executive of Columbia Sportswear, said in an interview on Wednesday that his company had drafted a policy mandating vaccines months ago. But it had held off carrying it out until Mr. Biden announced last week that he was directing the Labor Department to issue an emergency safety declaration that would effectively function as a vaccine mandate for tens of millions of workers. Columbia Sportswear told its workers that it will put a vaccine requirement in place next week.
Mr. Boyle said Columbia was concerned that by acting alone it would risk losing as many as half of its workers in distribution centers and retail stores. Mr. Biden’s order, he said, reduced the risk that workers who don’t want to get vaccinated would quit to work elsewhere.
“There’s much less opportunity for people to go somewhere they don’t need to be vaccinated,” he said.
Mr. Boyle said vaccinations had divided Columbia’s work force. Managers in its Portland, Ore., headquarters have largely embraced the shots, he said, but retail and warehouse workers throughout the country have been more reluctant. He said that hesitancy had hurt the company, with infections and the threat of infection forcing closures and cleanings of locations.
“Those operations are predicated on people working together closely,” he said. Having unvaccinated workers is “highly disruptive.”
Several of the business leaders who met with Mr. Biden have installed mandates already, for at least part of their work force, including Disney, Walgreens and Children’s Hospital of Philadelphia.
Ford Motor and its autonomous driving affiliate, Argo AI, have teamed up with Walmart to begin testing the home delivery of groceries and other items by self-driving cars in three cities this year.
The service will start in Miami, Washington and Austin, Texas, and will be limited to specific areas but is intended to expand over time, Argo said in a statement on Wednesday. The service will start operating with a half dozen vehicles equipped with Argo’s technology, although two trained test drivers will be in the car for safety.
“Our focus on the testing and development of self-driving technology that operates in urban areas where customer demand is high really comes to life with this collaboration,” Argo’s founder and chief executive, Bryan Salesky, said. “Working together with Walmart and Ford across three markets, we’re showing the potential for autonomous vehicle delivery services at scale.”
Ford and Argo, which also counts Volkswagen as an investor and a partner, have also formed an alliance with Lyft to begin offering rides in self-driving cars. They aim to start the service in Miami this year and expand to Austin next year. Argo has been testing about 150 autonomous vehicles in six U.S. cities.
Waymo, the autonomous-driving company owned by Google’s parent, Alphabet, has been testing a limited driverless ride-hailing service in Phoenix for several years.
Just a few years ago, automakers and technology companies expected self-driving cars to take off quickly, but found that developing the technology was more complex and difficult than they had thought.
In 2019, Elon Musk, the chief executive of Tesla, said his company would have one million self-driving taxis on the road by 2020. But it has yet to demonstrate vehicles that can pilot themselves without humans behind steering wheels.
A fire in a cable connecting the British and French power systems has sent already overheated British electricity rates soaring Wednesday.
National Grid, the British electric power company, said that the fire had occurred at a facility in Sellindge, near the English Channel, and that the cable would be out of service for about six months.
The cause of the fire was said to be under investigation.
The Kent Fire and Rescue Service said Wednesday morning that it was fighting the blaze with as many as 12 fire engines and making “progress,” though firefighters were expected to remain on the scene for hours.
News of the outage jolted the markets. A measure of wholesale electricity, British day-ahead power prices, reached as high as 481.88 pounds per megawatt-hour, according to Epex Spot, a trading platform. That level is several times what is normal, though prices had been soaring in recent days.
Another strand of the cable, known as an interconnector, is down for maintenance until Sept. 25. Together, the two outages involve enough electricity to power two million homes, according to National Grid.
A National Grid spokesman said the company had arranged sufficient backup power to get through the peak evening period on Wednesday.
Britain normally imports 3 gigawatts of power from France, enough to supply three million homes, the spokesman said.
The bizarre events on Wednesday illustrate how electric power systems are under pressure from the closing of conventional plants powered by coal and nuclear, and the growing reliance on renewable energy like wind and solar, whose output can vary according to the breeze and the sun.
These factors, and the increasing demand for energy as the economy recovers from the pandemic, have left Britain with slim spare capacity in electric power generation.
Adding to the uncertainty, breezes of late have been feeble, cutting the production of electricity from Britain’s many offshore wind turbines.
Losing the cable will further squeeze the power grid at an inopportune time, analysts say. Prices of natural gas, the fuel for plants that provide power during times of peak demand, are already at very high levels. Part of the reason is that Europe has not built up reserve storage of gas for the winter, because of high consumption in China and elsewhere.
Natural gas futures rose more than 6 percent on Wednesday.
“This incident has put more pressure and reliance on flexible generation sources, such as coal, gas and batteries, to ensure the lights are kept on,” said Catherine Newman, chief executive of Limejump, a company that manages large-scale batteries and other devices used to balance the power system.
The situation means that National Grid, the British grid operator, needs to press standby sources of generation, like high-polluting coal-fired plants, into service, often paying high prices.
As a result, energy prices are likely to rise further for consumers in Britain and elsewhere in Europe, where the effects of high natural gas prices are being felt. Britain’s energy regulatory agency, Ofgem, has already notified consumers that ceilings on some standard energy rates will be raised 12 percent.
Industry is being squeezed as well. Gareth Stace, director of UK Steel, a trade body, said in a statement on Wednesday that “extortionate prices are forcing some U.K. steelmakers to suspend their operations” during periods when prices soar. The high prices are signs of an “unhealthy” energy market, he said.
Consumers all over Europe are being squeezed by high energy prices. On Tuesday, Spain’s government, facing political pressure, announced measures to protect angry consumers.
In addition, the incident is a reminder that despite having left the European Union, Britain remains dependent on member countries in many ways, including for imports of energy.
The British power system is linked to France, Ireland and other European countries through large-capacity undersea cables. The idea is to send power back and forth between grids to balance the systems.
Of late, analysts say, the flow from France has been mostly one way, as Britain takes advantage of relatively inexpensive nuclear power generated elsewhere.
A report released on Tuesday that examined poverty in the United States has invited comparisons of the effectiveness of government stimulus in response to the two most recent economic emergencies: the 2009 financial crisis and the 2020 coronavirus pandemic.
Despite the pandemic, the share of people living in poverty in the United States fell to a record low last year — a finding that economists and policymakers across the political spectrum have hailed as a sign that the emergency stimulus program worked.
Robert Reich, the Berkeley economics professor who served as labor secretary under President Clinton, tweeted that the data proved government aid was effective in fighting poverty. Douglas Holtz-Eakin, head of the conservative American Action Forum and a former adviser to Senator John McCain, told the DealBook newsletter that the recent stimulus was “the best policy response to a recession the U.S. has ever seen.”
But there is still room for interpretation. According to the report, a measure of the poverty rate that accounts for the impact of government programs fell to 9.1 percent of the population last year, from 11.8 percent in 2019. But the official rate, which was devised in 1963 by a Polish immigrant and Social Security administrator, Mollie Orshansky, is based almost entirely on the cost of food and leaves out some major aid programs, rose last year to 11.4 percent. (The difference between poverty measures was once a plotline in “The West Wing.”)
So, was the pandemic stimulus the “best” emergency response? One thing it has going for it is a seemingly flattering comparison to the government’s efforts in the financial crisis in 2009.
As David Leonhardt of The Morning newsletter recently wrote, President Obama’s 2009 economic aid package has long been seen as a failure, even though the economy began growing again within a few months of its passage and it likely helped stave off an even deeper downturn. Government benefits and tax changes lifted 53 million Americans out of poverty last year, more in absolute and relative terms than in 2009, according to calculations from the liberal-leaning Center on Budget and Policy Priorities.
But consider the other side of the ledger. In 2009, the government spent $810 billion on its stimulus. Last year’s increase in government aid was some $1.8 trillion. That translates, very roughly, to around $35,000 per person lifted out of poverty versus $20,000 in 2009, though not all the money in either package went to lower-income Americans.
The debate over cost and efficiency will influence whether the government should spend trillions more, as President Biden and many Democrats now want, to fund more permanent government aid programs. Detractors, including many Republicans, can point to data showing a seeming drop in the benefit per dollar spent as a reason to be cautious.
But Arloc Sherman, an economist at the Center for Budget and Policy Priorities, said spending now could save money later.
“I would not say the 2020 stimulus was a less effective stimulus,” he said. “But it could have been more efficient and effective if we had a comprehensive and well-designed security system in the first place.”
Canadian Pacific has emerged as the winner in a long-running battle to acquire Kansas City Southern, putting it in position to become the first railroad operator whose network extends from Canada to Mexico.
Its rival in the bidding, Canadian National, said on Wednesday that it received notice from Kansas City Southern that it was terminating a merger agreement they signed in May.
“The decision not to pursue our proposed merger with KCS any further is the right decision for CN as responsible fiduciaries of our shareholders’ interests,” Jean-Jacques Ruest, the chief executive of Canadian National, said in a statement.
At stake was possibly the last major acquisition of a major railroad; mergers have consolidated the industry to seven railways from more than 100. The key component of the deal is access to Mexico, as railroads look to capitalize on trade flows across North America on the heels of the United States-Mexico-Canada Agreement, which was signed into law last year.
“Timing, relative to what’s occurring in the marketplace, has never been more ideal,” said Keith Creel, the chief executive of Canadian Pacific. “With the U.S.M.C.A., with the nearshoring that’s occurring with many companies that are trying to stabilize their supply chain — this will become the backbone to enable that to occur.”
Canadian Pacific first put forward its $29 billion bid for Kansas City Southern in March, before being topped by a $33.7 billion offer from Canadian National in April. But the Canadian National deal hit a regulatory challenge last month. In response, Kansas City Southern said on Sunday that it had chosen Canadian Pacific as a superior suitor.
Canadian Pacific had its sweetened cash-and-stock offer in August, valuing Kansas City at about $31 billion. The key was “to avoid a bidding war,” Mr. Creel said. Canadian Pacific’s winning bid was higher than its original offer, but it was still lower than Canadian National’s.
“I knew that our best play was to keep our powder dry, wait for the right opportunity, and then make our last best offer,” he said.
To fund its deal, Canadian Pacific raised the value it prescribed to Kansas City Southern shares and increased its debt financing to $9.5 billion from $8.6 billion.
Shares of Canadian Pacific were up a little over 1 percent on Wednesday, while shares of Canadian National were up more than 3 percent. Shares of Kansas City Southern were up less than 1 percent.
Canadian National pulled out as it wrestled with investors unhappy with its role in the takeover tussle. TCI Fund Management, a longtime railroad investor that owns more than 5 percent of Canadian National’s shares, started a proxy battle to oust Mr. Ruest, angered in part over what it called a “reckless bid” for Kansas City Southern.
TCI demanded that Canadian National stop pursuing the acquisition and overhaul its board. It is also the largest shareholder in Canadian Pacific, with an 8 percent stake.
Kansas City Southern will pay Canadian National a $700 million breakup fee, as well as refund a fee worth another $700 million that Canadian National had paid to end the railroad’s original deal with Canadian Pacific.
The turning point in the deal was a ruling by the regulator overseeing rail deals, the Surface Transportation Board, which decided unanimously against the companies’ use of a voting trust, a common but controversial structure in such deals.
The ruling was the first real test of guidelines put in place in 2001 to increase competition in deals that involve the largest railroads. Canadian Pacific, which has a proposed voting trust that regulators have not blocked, successfully argued for its deal with Kansas City Southern to be evaluated outside those guidelines, given its smaller size.
Still, that was before President Biden’s executive order in July aimed at anti-competition maneuvers in the railroad industry and a host of others. The Surface Transportation Board must still approve the Kanas City Southern and Canadian Pacific deal with this new scrutiny in the backdrop. Regulators in Mexico and shareholders must approve it as well.
The executive order “makes me more firmly convinced of our ability to get this deal approved,” said Mr. Creel, who extolled the deal’s ability to bring trucks off the road at a time when the Biden administration is keenly focused on carbon emissions. The deal is the only combination of the largest railroads to have no overlap, he said.
SAN JOSE, Calif. — A key whistle-blower against Theranos, the blood testing start-up that collapsed under scandal in 2018, testified on Tuesday in the fraud trial of the company’s founder, Elizabeth Holmes.
The whistle-blower, Erika Cheung, worked as a lab assistant at Theranos for six months in 2013 and 2014 before reporting lab testing problems at the company to federal agents at the Centers for Medicare & Medicaid Services in 2015. Her first day of testimony revealed to a jury what those following the Theranos saga most likely already knew: The company’s celebrated blood testing technology did not work.
Her testimony is expected to continue on Wednesday.
In a crowded courtroom, Ms. Cheung said she had turned down other job offers out of college to join Theranos because she was dazzled by Ms. Holmes’s charisma and inspired by her success as a woman in technology. Ms. Holmes said Theranos’s machines, called Edison, would be able to quickly and cheaply discern whether people had a variety of health ailments using just a few drops of blood.
“She was very articulate and had a strong sense of conviction about her mission,” Ms. Cheung said of Ms. Holmes.
Who’s Who in the Elizabeth Holmes Trial
Erin Woo📍Reporting from San Jose, Calif.
Who’s Who in the Elizabeth Holmes Trial
Erin Woo📍Reporting from San Jose, Calif.
Elizabeth Holmes, the disgraced founder of the blood testing start-up Theranos, stands trial for two counts of conspiracy to commit wire fraud and 10 counts of wire fraud.
Here are some of the key figures in the case →
But Ms. Cheung’s excitement faded after she witnessed actions she disagreed with in Theranos’s lab, she said. In some cases, outlier results of the blood tests were deleted to ensure that Theranos’s technology passed quality control tests. Ms. Cheung was also alarmed when she donated her own blood to Theranos and tests on the company’s machines said she had a vitamin D deficiency but traditional tests did not, she testified.
Ms. Cheung, who viewed a menu of around 90 blood tests offered by Theranos, said that despite Ms. Holmes’s promises about the Edison machines, they could process only a handful of the tests listed. The rest had to be done by traditional blood analyzers or sent out to a diagnostic company, she said.
Ultimately, Ms. Cheung resigned over her misgivings about Theranos’s testing services.
“I was uncomfortable processing patient samples,” she said. “I did not think the technology we were using was adequate enough to be engaging in that behavior.”
During Ms. Cheung’s testimony, Ms. Holmes’s lawyers objected to a wide variety of emails and other internal communications submitted by the prosecution as evidence. The two sides sparred over the rules of the arguments that could be used and the relevance of Ms. Cheung’s testimony.
“The C.E.O. is not responsible for every communication that happens within a company,” said Lance Wade, a lawyer representing Ms. Holmes.
John Bostic, a prosecutor and an assistant U.S. attorney, argued that documents showing Theranos’s internal issues were relevant to the case, regardless of whether Ms. Holmes’s name was on them.
Mr. Wade countered that Ms. Cheung had been an entry-level employee and hardly interacted with Ms. Holmes.
“To the best of our knowledge, the interview you just heard was the longest conversation she ever had with our client,” he said.
Through it all, Ms. Holmes sat quietly in a gray blazer and black dress, watching the proceedings from behind a medical mask.
Ms. Cheung’s 2015 letter to the Centers for Medicare & Medicaid Services outlining problems with Theranos’s testing triggered a surprise inspection by the agency that led the company to close its labs. Tyler Shultz, another young employee in Theranos’s lab, also shared details about the lab problems with The Wall Street Journal, which published exposés of the company. Mr. Shultz is also listed as a potential witness in the trial. (An earlier version of this item misspelled his name as Schultz.)
Since her role in Theranos’s demise, Ms. Cheung has become an advocate for ethics in technology. She has delivered a TED Talk about speaking truth to power and helped found Ethics in Entrepreneurship, a nonprofit that provides ethics training and workshops to start-up founders, workers and investors.
Spain’s government approved emergency measures on Tuesday to help households pay for the spiraling cost of electricity, and promised to cap profits made by electricity companies as a result of the recent jump in the price of natural gas.
Wholesale prices for natural gas across Europe have soared to levels almost five times where they were in 2019. The rising price is causing electric bills to jump, because gas is often used to generate electricity. Some other European governments have also recently outlined plans to help consumers, including Greece, where the government is setting up a fund to subsidize the electricity bills paid by households.
In Spain, the steep rise has become a political problem. Pedro Sánchez, the Socialist prime minister, leads a minority left-wing coalition government that relies on support from Unidas Podemos, a party committed to protecting the most vulnerable households. The package of emergency measures would, among other things, protect poorer families that cannot pay their bills by extending the grace period before utilities can cut off their power.
The government’s action was announced after Mr. Sánchez outlined his plans in a television interview on Monday night. Without providing details, he said about 650 million euros (about $770 million) of “extraordinary profits” would be taken from energy companies and “redirected to consumers.”
Some welcomed the government’s decision. “No Spanish government had ever dared to take on the energy companies that control our market as an oligopoly, so I consider this to be historic, but obviously it’s going to create a lot of anger in these companies,” said Javier García Breva, a former Spanish lawmaker and an expert on renewable energy.
But an opposition politician from the Ciudadanos party, Edmundo Bal, said Mr. Sánchez was hurriedly applying a “patch” on the energy problem, rather than seeking a long-term solution.
Electric companies said the moves would be counterproductive. Natural gas prices have risen across Europe because of a variety of factors, including a resurgence of global demand after pandemic lockdowns and a late-winter cold snap that drained storage levels.
Iberdrola, one of Spain’s three main electric companies, said energy prices were rising because of “international factors” and would not be restrained by the government’s action. The association representing Spain’s nuclear power producers threatened to suspend operations in response.
Mr. Sánchez pledged to reduce electric rates paid by consumers to the level of 2018, excluding inflation. The measures approved Tuesday include a cut on the electricity generation tax, which is paid by consumers, until the end of this year. In June, the government reduced the value-added tax paid on electric bills to 10 percent from 21 percent.
The latest data from the national statistics office shows that Spaniards last month paid about 35 percent more than a year earlier for their electricity, while the wholesale price of electricity has continued to climb in recent weeks.
Teresa Ribera, Spain’s minister for ecological transition, told reporters that the emergency measures would help reduce the monthly electricity bill paid by households by 22 percent.
To achieve this goal, the government will cap profits made by energy companies from the worldwide rise in natural gas prices until at least March, when the situation will be reviewed.
“The forecast for the coming months points to a spiral without precedent,” Ms. Ribera said, which in turn “impacts the well-being of families and the whole of the Spanish economy.”
Demand for backup generators soared over the last year, as housebound Americans focused on preparing for the worst just as a surge of extreme weather ensured many experienced it.
The vast majority are made by a single company: Generac, a 62-year-old Waukesha, Wis., manufacturer that accounts for roughly 75 percent of standby home generator sales in the United States. Its dominance of the market and the growing threat posed by increasingly erratic weather have turned it into a Wall Street darling, Matt Phillips reports for The New York Times.
Generac’s stock price is up almost 800 percent since the end of 2018, and its profit has roughly doubled since June 2020. Need is driving the demand. The United States suffered 383 electricity disturbances last year, according to the Energy Department, up from 141 in 2016. As of the end of June — the most recent data available — there had been 210 this year, a 34 percent leap from the same point in 2020.
“We’re not climate scientists, but weather events have become a lot more severe,” said Aaron Jagdfeld, the chief executive of Generac. He ticked off a list of headline-grabbing weather events over the past year, from freezes to floods to droughts.
“The air is hotter, the water is warmer,” he said. “And the combination of those two things is producing weather events that are more extreme.”
Even after opening a new plant in Trenton, S.C., demand and pandemic-related supply chain snarls have pushed customers’ wait times to roughly seven months. READ THE ARTICLE →
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U.S. stocks rose in midday trading Wednesday, with the S&P 500 ticking up 0.7 percent and the Nasdaq composite up 0.4 percent.
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The S&P 500 has fallen in six of the last seven trading sessions. Its streak of five days of losses that was broken by a gain on Monday was its worst since February.
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The Consumer Price Index rose 5.3 percent in August from a year earlier, the Labor Department reported Tuesday, but the rate of inflation fell slightly for its second consecutive month. Economists will be watching consumer spending data for August, which will be released on Thursday, after shopping at U.S. retailers dropped sharply in July.
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European stocks were lower, with the Stoxx Europe 600 falling 0.8 percent. Asian markets closed lower, with the Shanghai Composite Index down 0.2 percent. China’s retail sales grew just 2.5 percent in August, data released on Wednesday showed.
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Oil prices rose, with West Texas Intermediate, the U.S. crude benchmark, climbing about 3 percent to $72.54 a barrel.
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Unionized workers for Nabisco, the company that makes Oreos, Chips Ahoy, Newtons and other snacks, reached a tentative agreement on a new contract with the company’s owner, Mondelez International. Employees represented by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union at the plants in Colorado, Georgia, Illinois, Oregon and Virginia will be able to vote on ratifying the new contracts in the coming days. The move comes after workers began a strike in early August over what they claimed were unfair demands for concessions in contract negotiations.
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American Airlines said it would invest $200 million in Gol, a low-cost Brazilian carrier, expanding its stake in the company to 5.2 percent. The two airlines also deepened their code-sharing agreement. The news comes two months after American announced it was taking a minority stake in another South American carrier, Chile’s JetSMART.
The Biden administration is trying to build support for proposals to overhaul the nation’s rickety child care system as it pushes Congress to embrace a $3.5 trillion plan to expand social safety programs and looks for ways to combat ongoing labor shortages.
In a new report released on Wednesday, the Treasury Department painted a dire picture of child care in America, outlining what it called failures by the private sector to provide high quality care at affordable prices and making the case that the federal government must do more to help families care for their children.
“This is not just happenstance — sound economic principles explain why relying on private money to provide child care is bound to come up short,” the report said.
The Biden administration has already disbursed nearly $40 billion to help child care providers and day care centers through funds that were approved in the American Rescue Plan, which Congress passed earlier this year. The Treasury Department has also been distributing monthly advance child tax credit payments to families with children.
On Wednesday afternoon, Vice President Kamala Harris will visit the Treasury Department to make the case for more child care funding.
Mr. Biden’s plan includes child care subsidies for low and middle-income families, universal prekindergarten for children who are 3 and 4 years old and a permanent expansion of the child and dependent care tax credits.
The Treasury report argues that families are currently spending about 13 percent of their income to pay for child care costs for a child under the age of 5. Despite the high costs, child care providers tend to be poorly compensated.
The patchwork nature of the child care system often creates incentives for a parent to leave the labor force, losing access to health insurance and retirement benefits. The United States is currently grappling with a labor shortage, and the Biden administration views bolstering access to child care as a way to get people back to work.
“In basic economic terms, the president’s proposals will expand both demand for and supply of child care,” the report said. “With expanded demand, more children will have access to the rich early experiences and more parents will be able to choose to remain in the labor force.”
Treasury Secretary Janet L. Yellen is pressing Representative Richard Neal, the Democratic chairman of the Ways and Means Committee, to include the Biden administration’s full proposal for bolstering the Internal Revenue Service in its $3.5 trillion spending package, arguing that more resources and greater powers to catch tax evaders are crucial for reducing the “tax gap.”
In a letter to Mr. Neal, Ms. Yellen urged lawmakers not to water down a central piece of the proposal, which would give the Internal Revenue Service visibility into the financial accounts of taxpayers through more robust reporting requirements. Treasury officials say that will enable the agency to better crack down on rich people and companies who are not paying what they owe.
Legislation released by House Democrats earlier this week included the $80 billion in additional funding for the I.R.S. that the Biden administration had proposed to help expand staffing and enforcement capacity. However, a separate proposal to enact an “information reporting” regime was absent from the bill.
“As you consider specific policy choices in designing an information reporting regime, it is important to ensure that the reporting regime is sufficiently comprehensive, so that tax evaders are not able to structure financial accounts to avoid it,” Ms. Yellen wrote. “Any suggestion that instead this reporting regime will be used to target enforcement efforts on ordinary Americans is wholly misguided.”
Critics of the proposal have argued that giving the I.R.S. more power to peer into taxpayer financial information represents an invasion of privacy and have said it could lead to frivolous audits for political reasons. The Biden administration insists that audit rates will not rise for taxpayers who earn less than $400,000.
In an addendum to the letter, Mark J. Mazur, Treasury’s acting assistant secretary for tax policy, reiterated Treasury’s estimates that the investment in enforcement staff and new information reporting powers could generate $700 billion in government revenue over a decade. He suggested that Congress might be considering including a more modest reporting mechanism and warned that doing so would be less effective.
“Clearly, this will lower the estimated revenue raised from the proposed reporting regime relative to earlier administration estimates,” Mr. Mazur wrote.
At a hearing on Wednesday, Mr. Neal said he had received the letters and underscored the importance of strengthening tax enforcement without adding new burdens to small businesses.
“We are in conversations with the administration on reporting proposals that target sophisticated tax avoidance and evasion without impacting middle-class and working Americans,” Mr. Neal said.